Archives for White Stream

As you know, Europeans with an interest in energy affairs get very excited when discussing the source of the gas they’ll in 5-10 years. Especially in Italy, where Berlusconi’s center-right government is openly defying EU policy on the matter and nurturing very close ties to Russia, the debate tends to be quite heated and often partisan. We would like then to here the view of an informed and independent outsider on this.

Two events coincided this week to point towards further complications in Euro-Caspian energy geo-economics. Azerbaijan has signed a memorandum of understanding (MoU) with Georgia and Romania to promote liquefied natural gas (LNG) transportation across the Black Sea, and has separately announced the possibility of postponing a decision on the start-up of production from the offshore Shah Deniz Two natural gas field until 2017 (press reports cite various years from 2016 to 2018).

Statements by Azerbaijani and Turkish diplomats indicate that the two sides have reached an agreement in principle concerning the price that Turkey will pay for gas from the offshore Shah Deniz deposit for its own domestic consumption. With these signals, the two countries are on the road to settling issues related to conditions for Shah Deniz gas to transit Turkey to Europe through the Nabucco pipeline.

Various diplomats appear to be questioning the supposed competition between the Nabucco and the South Stream natural gas pipelines. In fact, Russia and Turkey are collaborating to block the full implementation of the EU’s Southern Corridor energy strategy so as to assert a duopoly over natural gas supplies to Europe.

Viktor Yanukovych came first in the presidential elections in Ukraine, but Yuliya Tymoshenko has instructed lawyers to bring to the courts evidence of voting irregularities to put Yanukovych’s margin of victory under question. Even if the latter is able to muster a negative majority to oust her from office and form his own parliamentary majority, he may be forced to call new parliamentary elections. Nevertheless, he has already moved on the energy front through floating new proposals, if not yet able to offer them formally for legislative consideration. The elections in Ukraine change the odds also for other projects in the east-west energy corridor from Central Asia and the Caucasus to Europe.

Ukraine’s run-off election between Prime Minister Yulia Tymoshenko and rival Viktor Yanukovych, to be held on Sunday, may decide the future of a pipeline that could be used to deliver Caspian Sea oil to Europe, bypassing both Russia and Turkey.

The opening of the first segment of the Turkmenistan-China gas pipeline last month is only one in a series of recent events in Caspian Sea basin energy developments. It signifies Turkmenistan’s first real moves to break its dependence upon Gazprom and the Russian state for international sales of its energy resources. These developments are to the detriment of Europe, which remains dependent upon Russia and Turkey as transit countries and has been unable to push forward the implementation of its Nabucco pipeline project.

With the entry of Iraq into the mix of potential suppliers of natural gas for the Nabucco pipeline to Europe and the proliferation of alternative supply lines beyond the Russian-sponsored rival South Stream pipeline, the “classical” variant of the Nabucco pipeline is undergoing significant modification, just as it moves closer to final realization.

In all the debate and speculation over the various pipelines planned for the Caspian-South Caucasus corridor and adjacent regions (Nabucco, South Stream, White Stream, and Trans-Caspian Gas Pipelines in addition to various oil pipeline projects), the troubled state of energy relations between Azerbaijan and Turkey has been lost from view, mainly due to their stellar cooperation in the past over the Baku-Tbilisi-Ceyhan oil pipeline and South Caucasus Pipeline for gas in particular.

Peace, Conflict and Cooperation in Greater Eurasian Energy Development Strategy and Security Policy.

About: Robert M. Cutler

Dr. Robert M. Cutler is Senior Research Fellow, Institute of European, Russian & Eurasian Studies, Carleton University, Ottawa. Based in both Montreal and Brussels, he was educated at the Massachusetts Institute of Technology (B.Sc.), Geneva Graduate Institute of International Studies (Gallatin Fellow) and The University of Michigan (Ph.D.), and has held research and teaching appointments at major universities in Canada, France, Russia, Switzerland and the United States. After a dozen years exclusively in universities (where he taught subjects in international relations, comparative politics and political philosophy and all levels of instruction), he expanded into policy analysis and consulting, foremost as an Energy Security and Geo-economics Specialist, now spending up to half his time in Brussels. Besides producing the whole portfolio of scholarly, policy, and public-intellectual information products, he continues to serve on academic-journal and policy-review editorial boards in addition to executive committees of professional scholarly and policy research organizations.